Corporate philanthropic giving and nature of stock market reaction: Evidence from China

Zhu, Chao; Zhang, Yuwei

doi:10.1002/mde.3478

Cited by 7 publications

(14 citation statements)

References 45 publications

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“…Using the event study method and the difference-in-difference method for regression analysis, it is concluded that H1, H2, and H3 all pass the test and, at the same time, pass the robustness test, indicating that the research results are robust and reliable. This paper finds that non-state-owned enterprises have higher social attention than state-owned enterprises in emergency donation and have better stock market performance, which is consistent with the conclusion of Zhu and Zhang (2021) . This paper also draws a new conclusion, in the construction of emergency projects, construction enterprises with engineering participation will obtain more social concern and, therefore, better stock market response.…”

Section: Empirical Analysissupporting

confidence: 85%

“…The different natures of corporate equity will lead to different stock market reactions. Scholars Hoi, Zhang, and Zhuhave showed that the role of charitable donations in promoting corporate performance is more robust in non-state-owned enterprises than in state-owned enterprises (Zhang et al, 2016;Hoi et al, 2019;Zhu and Zhang, 2021). The main reason is that the public expects state-owned enterprises to fulfill their social responsibility more than non-state-owned enterprises.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

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Emergency engineering reconstruction mode based on the perspective of professional donations

Zhang²,

Khaliq³

et al. 2023

Front. Psychol.

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IntroductionIn the construction of emergency engineering, the effective participation of organizations such as government and construction enterprises can improve engineering emergency services to emergency adaptive, which faces the challenge of the enthusiasm of enterprises’ emergency participation. This study proposed a new diversified social governance mode for public emergency facility construction.MethodsThis paper empirically analyzes the performance of stock market returns before and after construction enterprises’ participation in emergency engineering.ResultsAgainst the backdrop of COVID-19, the analysis based on the sample data of 141 listed companies found that both construction enterprises directly involved in emergency hospital construction and non-state-owned enterprises involved in donations have higher excess return rates. In contrast, social concern has a positive mediating effect between emergency donations and stock market returns. The study suggests that stock market returns from donation behavior and reputation capital become incentives for firms to actively participate in emergency donations, providing a behavioral basis for professional donations by construction firms.DiscussionBased on the above assumptions, this paper proposes the organizational model of emergency engineering construction and the “Engineering Community” relationship based on the “Engineering Multi-governance” theory. This paper is the first to study the emergency engineering construction model from the perspective of professional donation behavior.

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Section: Empirical Analysissupporting

confidence: 85%

Section: Hypothesis Developmentmentioning

confidence: 99%

Emergency engineering reconstruction mode based on the perspective of professional donations

Zhang²,

Khaliq³

et al. 2023

Front. Psychol.

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“…For example, Gao et al ( 2012 : 363) found a positive investor reaction to CPDR announcements in response to the 2008 Wenchuan earthquake in China, but only for Business-to-Consumer companies. Relatedly, Zhu and Zhang ( 2022 ) also found a positive investor reaction in China during the COVID-19 epidemic, but only for privately-owned enterprises. However, Muller and Kräussl ( 2011 ) found a negative yet insignificant shareholder reaction to U.S. firms’ CPDR after Hurricane Katrina in 2005.…”

Section: Research On Corporate Philanthropy and Natural Disasters: Th...mentioning

confidence: 98%

“…Gao et al ( 2012 : 368) suggested very briefly that this signaling effect might be one of the reasons along with the ‘buying goodwill’ effect for the positive shareholder reaction to CPDR they found, but they did not attempt to parse out the two effects. Zhu and Zhang ( 2022 ) explored briefly and found support for this explanation but did not ground their study in a broader conceptual framework to link back to theory.…”

Section: Research On Corporate Philanthropy and Natural Disasters: Th...mentioning

confidence: 99%

Shareholder reaction to corporate philanthropy after a natural disaster: an empirical exploration of the “signaling financial prospects” explanation

2023

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Corporate response to natural disaster in the forms of cash and/or in-kind donations (corporate philanthropic disaster response, or CPDR) is a growing form of corporate philanthropy. Through an event study methodology based on 1,775 firms listed on the Tokyo Stock Exchange, we analyze shareholder reaction to CPDR announcements after the 2016 Kumamoto earthquakes in Japan. Controlling for the possibility that the most common explanations (buying goodwill and corporate governance) are at play, our results provide an empirical test of a little-explored explanation for the positive shareholder reaction to CPDR: namely, that corporate philanthropy is a market signal to outside investors of the firm's future financial prospects. We find this explanation to be significant. Of note are also the facts that shareholder reaction is only significantly positive in the case of cash donation (as opposed to in-kind), and is more positive when announced early. Overall, our results align with the "strategic philanthropy" view grounded in resource-dependence theory. But instead of the typical focus on non-financial stakeholders, we argue that philanthropic donations can be used to directly influence investors.

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“…Second, we contribute to the literature on corporate philanthropy by examining the role of major customers. Extant research has examined the role of the government and social activists in the field (Gao & Yang, 2016;Luo et al, 2016;Zhu & Zhang, 2022). However, the role of major customers has largely been overlooked.…”

Section: Introductionmentioning

confidence: 99%

Customer concentration and corporate charitable donations: Evidence from China

2022

Manage Decis Econ

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This study examines the impact of customer concentration on corporate charitable donations. Drawing on stakeholder and resource dependency theories, we argue that when firms rely on a small set of customers for a significant proportion of sales revenue, they will reduce corporate charitable donations. State ownership and industry competition moderate this relationship. Using data on corporate donations from Chinese listed firms between 2009 and 2019, we find support for our hypotheses. Our study contributes to the literature on customer concentration and corporate philanthropy in emerging economies.

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Corporate philanthropic giving and nature of stock market reaction: Evidence from China

Cited by 7 publications

References 45 publications

Emergency engineering reconstruction mode based on the perspective of professional donations

Emergency engineering reconstruction mode based on the perspective of professional donations

Shareholder reaction to corporate philanthropy after a natural disaster: an empirical exploration of the “signaling financial prospects” explanation

Customer concentration and corporate charitable donations: Evidence from China

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